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MEMORANDUM OPINION
HALPERN, Judge: This case is a partnership-level action
based upon a petition filed pursuant to section 6226.1 The
petition was filed in response to respondent’s notice of final
partnership administrative adjustment (the FPAA) dated October 8,
2004. The case is before us on a motion for partial summary
judgment (the motion) by a participating partner, Arthur M. Winn
(participating partner or Mr. Winn), who until December 26, 2000,
was a limited partner in Countryside Limited Partnership
(Countryside). Respondent objects.
The FPAA alleges that a distribution by Countryside to Mr.
Winn and to Lawrence H. Curtis (Mr. Curtis), another limited
partner, on December 26, 2000, in liquidation of their
partnership interests in Countryside resulted in $12,055,192 of
capital gain to Mr. Winn and Mr. Curtis, cumulatively, for that
year. The FPAA also seeks to (1) deny to Countryside a basis
step-up, pursuant to section 734(b)(1)(B), for its property
remaining after the distribution to Mr. Winn and Mr. Curtis, (2)
require a basis reduction pursuant to section 743(b)(2) for
certain notes held by an L.L.C. in which Countryside, through
another L.L.C., owned a 98-percent interest, or, alternatively,
disregard both L.L.C.s, and (3) impose underpayment penalties
under section 6662.
1 Unless otherwise noted, all section references are to the
Internal Revenue Code in effect for the year at issue, 2000, and
all Rule references are to the Tax Court Rules of Practice and
Procedure.
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Last modified: March 27, 2008